Clean tech, Blockchain and Biotech help push the market higher

The US Indexes were all up on Monday (for the first time in a week), five Mag7 are announcing Q3 results this week and all of these ex MSFT were up. The VIX was up 1 at 20. The main indexes were; DJIA +0.65%, S&P 500 +0.27% and Nasdaq +0.26% (Mag7 -0.1%). On an equal weighted basis (our measure) the overall market was +1.42%. Breadth was strong at 69% (range of 12% to 88% over the last ten weeks) volumes were flat at 7.9b (the average daily volume over the last year of 8b). 

One day returns as follows - equal weight basis: Mag7 -0.1% (GOOGL +0.9%, AAPL +0.9%, META 0.9%, AMZN +0.3%, MSFT -0.4%, TSLA -2.5%), large cap +0.64%, medium cap, +1.03%, small cap +1.67% and micro cap +1.6%.

On a 1 and 2 week equal weight basis respectively; Market +0.2% and +1.3%, Mag7 +2.9% and +3.4%, Large caps -0.4% and -0.8%, Medium cap +0.2% and -0.1%, Small cap +0.3% and +0.8% and finally Micro cap +0.4% and +2.6%. 

Our risk monitor remains in favour of the larger cap stock but Micro has now outperformed the market on a 1w, 2w and 4w period. Micro caps have outperformed Large cap by 3.4% over the two weeks but have underperformed the market by 18% over the last 12 months.

The sector bias favored the Bull sectors again on Monday. Energy was the weakest sector driven by the oil price softness but both Renewable Energy Equipment +4.6% and Uranium +4.5% limited the sector decline. Technology was the strongest sector on Monday, helped by strong performance in Fintech +4.5%, Blockchain continues to seesaw and was +8.5% on Monday following Friday's fall, Computer Hardware and Computer Phones & Household Equipment were both >+3%. Healthcare was +1.75%, with Biotech +2.1%. The sector has outperformed the market over the last 2 weeks by 2.2%, but has lagged the market over 3 months. When it runs it runs very aggressively - it was +55% from mid Nov23 to Feb24. Too early to say the is the start of another run but it is worth watching. Consumer Non-Cyclicals was +1.72% with a strong performance pretty much across the entire sector and breadth of 77%.

A notable number of 52 week highs in the following sectors: Consumer Cyclicals (Hotels & Entertaining and Media & Publishing), Financials particularly Banking & Investment Services. Industrials was strong again (across the sector ex Transportation) and Technology (Software & IT Services and Technology Equipment again).

Notable high volumes in Consumer Cyclicals (across the sector), Industrials (across the sector ex Transportation) and Technology (Software & IT Services again)

Following Tesla's Q3 update (and massive outperformance) all eyes turn to five other Mag7 stocks that announce this week. GOOGL today, MSFT and META Wednesday and AMZN and AAPL Thursday. It is worthy of note that the higher risk assets have been materially outperforming - Blockchain, Biotech, Clean Energy. Whether the market will shrug off the wider geopolitical concerns is not clear but the oil market has softened as focus turns to the looming oil surplus vs fears of Iran oil field attacks.